A subsidiary of Intercontinental­Exchange Group, the owner of the Liffe
futures exchange, is to take over the administration of Libor from the
British Bankers’ Association

Responsibility for Libor has been handed to a US exchange group in the wake of revelations the global benchmark lending rate was rigged.

A subsidiary of Intercontinental­Exchange Group, the owner of the Liffe futures exchange, is to take over the administration from the British Bankers’ Association (BBA) of Libor – the London inter-bank offer rate, which is used to price contracts worth trillions of dollars worldwide.

ICE Benchmark Administration will begin to run Libor next month after the BBA’s board voted unanimously to give the US group the mandate to oversee the compilation.

The vote followed a recommendation by a tendering committee led by Baroness Hogg, chairman of the Financial Reporting Council, after the BBA’s handling of Libor was called into question following Barclays being fined £290m after the bank’s staff were found to have attempted to manipulate rates. In the wake of the scandal, the Government launched a review of Libor led by Martin Wheatley, chief executive of the Financial Conduct Authority, which recommended that responsibility for setting it should be handed to a new body.

Anthony Browne, chief executive of the BBA, said restoring confidence in Libor had been his “absolute priority”. “Today’s announcement is a further step in restoring the credibility of the rate,” he said. “The BBA has strongly stated the need for greater regulatory oversight of Libor, and tougher sanctions for those who try to manipulate it.